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Marvellous growth of Telecom in India

Posted by gcfraley / Category:

By Sateesh Sha


In the early 90's if you are grown up in India, you would have definitely remember the time when a telephone was a luxury for a household. There would be only one home in a given building with a telephone connection, and everyone living around that home, would rush to that home to make their important phone calls.

Today this seems to be a distant memory. We were living in a situation where a cell phone is no more a luxury but a necessity. If you ask the person how they have managed to survive without their cell phone, they would feasibly be dumbstruck and would go back to staring at the complexities of their phone!

The Indian Telecommunication Industry has definitely come a long way since the first telephone was introduced to India in 1882. Post Independence, for the population of 350 million there were about 84,000 telephone lines installed. By the year 1984 this number has raised upto 3.05 million.

This large number was just landlines. And the telecommunication industry then was run by a government majority. It was not until 1995 that the telecom industry became more liberal towards private companies entering into the sector. This was around the time that the Telecom Regulatory Authority of India was introduced.

Even though the first mobile handset was launched in India in 1995, it was of high price and only some people are capable to own one. To add to the cost of the handset which was Rs 40,000, the cost of a call was Rs 17 per minute.

It was only in April 2002, when the government decided to lower its stake in VSNL and throw the market open to more private companies that the mobile revolution really began in the country.

Current statistics indicate that as of March 2011 the total number of telephone subscribers including wireless and landline are 846.32 million. Of these 811.59 million are Cell phone subscribers and 34.73 million are landlines. The projected tele density will hit 1 billion by 2012. This would mean that 84% of the population would own a cell phone.

The Recent 3G spectrum auction in May 2010 could easily be an indicator of the direction in which the Telecom industry is heading. Nine companies -Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications took part in the auction.

The 3G auction generated about Rs 67,718.95 Crore ($ 15 billion), which is a world more than the Rs 35,000 Crore that the government hoped to collect from the auction of 3G as well as broadband.




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